White House, Democrats upbeat on new NAFTA despite impeachment

Erik Wasson, Bloomberg News

Impeachment moves could benefit new NAFTA: Evercore ISI

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The White House and House Democrats are increasingly upbeat that the stalled U.S.-Mexico-Canada trade agreement can be amended and approved in Congress, despite the rancorous impeachment inquiry into President Donald Trump.

“I think it will pass before Thanksgiving,” top Trump economic adviser Larry Kudlow said on CNBC Thursday morning. He told reporters afterward that “there is a sense among both parties that this is an historic trade deal.”

“It is quite true that President Trump and Speaker Pelosi have some significant political differences,” Kudlow said. “On the other hand, down through the many recent months, Speaker Pelosi has been cooperative, accessible, accommodative and helpful in setting up meetings and discussions with our team led by Bob Lighthizer with her key committee chairmen and subcommittee chairmen.”

U.S. Trade Representative Robert Lighthizer has intensified his meetings with a House Democratic working group to reach a USMCA deal. Approving the pact, which would replace the Clinton-era North American Free Trade Agreement, is a key goal for Trump as his re-election campaign nears. It also could help Democratic House members elected in swing districts demonstrate that impeachment hasn’t made legislating impossible.

Lighthizer met Wednesday and Thursday with Democrats and plans to meet again Friday morning.

House Speaker Nancy Pelosi said at a news conference Thursday that she’s “optimistic” about finishing work on the accord, but “we are not there yet.” House Majority Leader Steny Hoyer separately told a Bloomberg Government audience on Thursday that Democrats are “working hard to get to yes.”

“We think that the USMCA is better than the existing NAFTA,” Hoyer said. “This is not a leadership that is opposed to trade agreements,” he said, noting that he and Pelosi voted for NAFTA.

‘We’re Close’

The Democratic working group is focused on amending provisions on the environment, labor rights, drug patent protections and overall enforcement. After briefing Pelosi on the status of the talks Wednesday, members said the biggest sticking point remains enforcing labor provisions.

“We’re close, but there’s a meeting on labor enforcement where there’s still some distance,” said Illinois Representative Jan Schakowsky.

“We are closer than we were a week ago,” said Representative Mike Thompson of California.

A key aspect of the labor provision talks is a discussion with Mexican Finance Ministry officials in Washington this week about whether Mexico has allocated enough funding to implement a new labor law. About 200,000 union contracts, many negotiated without worker approval, need to be re-evaluated under the law in four years.

AFL-CIO President Richard Trumka, in an interview this month with the Washington Post, warned that the union group would fight the USMCA if isn’t amended to protect labor rights. The union argues weak labor protections in Mexico contribute to lowering wages in the U.S. and to companies moving jobs outside the country.

Mexican Finance Minister Arturo Herrera said Thursday in Washington that members of his team met with Democratic staff to explain the details of the nation’s labor overhaul, and that he hopes U.S. Congress will vote on the deal in early November. Mexico has sufficient budget resources to implement the changes, Herrera said in an interview.

Representative John Larson of Connecticut said his subgroup on the environment also was waiting for formal legal language from Lighthizer.

Pelosi defended the secretive nature of the negotiations, saying that even she has a hard time getting some information about the back-and-forth between Lighthizer and the Democratic working group.

She also said people suggesting that impeachment is holding up the trade deal “don’t know what they are talking about.”

After Thursday’s meeting with Lighthizer, House Ways and Means Chairman Richard Neal said participants are making progress on labor enforcement and that the additional information from Mexico was helpful.

Neal suggested that one way to get union support for the USMCA would be to tie it to a revision of government guarantees for multi-employer pensions. A bill passed by the House this year would let the government issue bonds to fund new low-interest loans to help stabilize pension funds.